From Texas to Kenya: Biden's Ambitious Semiconductor Strategy

The New York Times° reports on the Biden administration’s efforts to reshape the global semiconductor supply chain:

If the Biden administration had its way, far more electronic chips would be made in factories in, say, Texas or Arizona.

They would then be shipped to partner countries, like Costa Rica or Vietnam or Kenya, for final assembly and sent out into the world to run everything from refrigerators to supercomputers.

The US government wants to transform the world’s chip supply chain. It’s a two-pronged approach: lure foreign companies to set up shop in the States, and then find partner countries to handle the final assembly.

The goals are clear: blunt China’s growing influence in the semiconductor industry, reduce supply chain risks, and create jobs on home soil. It’s not just about chips either – they’re aiming to do the same with green tech like EV batteries and solar panels.

The numbers are impressive. Over $395 billion in semiconductor manufacturing investment and $405 billion in green tech and clean power have been attracted to the US in the past three years.

But it’s still going to be tough. East Asia still has the edge in cutting-edge tech, skilled workers, and lower costs. Taiwan alone produces more than 60% of the world’s chips and nearly all of the most advanced ones.

And the US semiconductor industry is facing a potential shortage of up to 90,000 workers in the next few years.

One of the most intriguing parts of this whole endeavour is the countries being brought into the fold. Costa Rica, Indonesia, Mexico, Panama, the Philippines, Vietnam, and soon Kenya. Not exactly the first places that spring to mind when you think “high-tech manufacturing”.

And if these efforts pay off, the US share of global chip manufacturing could rise from 10% to just 14% by 2032 – according to one report. Not exactly world domination. But it’s a start, I suppose.